How Do I Calculate How Much Tax I Pay Every Year?

by Bonnie Conrad, Demand Media

Compare your gross pay amount to your net.

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The fact that federal, state and local taxes are withheld directly from our paychecks tends to make those levies somewhat invisible. But no matter how they are collected, taxes reduce the amount of spendable cash you get from your job, complicating the budgeting process. Taking the time to add up all of the taxes you pay in the course of a year, from federal income taxes to state and local taxes to property and personal taxes, can be illuminating.

Using a Pay Stub

Step 1

Get a copy of your most recent pay stub. Circle all of the taxes listed, including federal income tax, Social Security tax, Medicare tax and state and local taxes.

Step 2

Multiply the current amount shown for each tax by the number of pay periods. If you are paid twice a month, use 24 as the multiplier. If you are paid every two weeks, use 26.

Add up all the amounts you calculated in Step 2 to get the total taxes withheld from your paycheck. Deduct the amount of your tax refund if you receive one. These are the total taxes related to your job.

Step 4

Gather receipts for any other taxes you pay, including property taxes, school taxes and personal taxes. Add these amounts to the total calculated in Step 3 to get your total tax burden for the year.

New Job

Step 1

Check with the hiring manager or your supervisor to get your exactly hourly rate, or your yearly salary if you are a salaried employee instead of an hourly one. The paperwork you received when you were hired should also contain this information.

Step 2

Multiply your hourly rate by 2,080 to get your annual salary based on a 40-hour work week and 52-week work schedule. Use the actual number of hours and weeks if you are not working full time.

Step 3

Look up the current tax brackets on the IRS website and use those figures to estimate your tax rate. You can estimate the gross amount of taxes by multiplying your tax rate times your annual salary.

Step 4

Use a tax preparation software package to get a more accurate picture of the taxes you can expect to pay based on your annual salary. Plug in the amount of your salary, then enter the number of deductions you expect to have, just as you would if you were actually doing your taxes.

Step 5

Add the amount of federal and state taxes calculated by your tax software. Add in any additional taxes, like property taxes and personal taxes, to get your total anticipated tax burden.

Things Needed

About the Author

Based in Pennsylvania, Bonnie Conrad has been working as a professional freelance writer since 2003. Her work can be seen on Credit Factor, Constant Content and a number of other websites. Conrad also works full-time as a computer technician and loves to write about a number of technician topics. She studied computer technology and business administration at Harrisburg Area Community College.

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